Indian Consumers Are Saving Money Due To GST Rate Cuts – Find Out How
Amidst the economic instability going on around the globe, India has managed to pose a beacon of hope and agility with ambitious growth targets and have been constantly working towards the consents of Make in India and Digital India campaigns.
One such undertaking added in the Parliament on 29th March 2017, The Goods and Services Tax (GST) which is an indirect tax, has replaced several chains of indirect taxes levied on every value addition. An online survey of 16000 people has revealed that people are finding GST rate cuts more effective, now that businesses are passing them down reduced prices.
A Peep Through into GST
GST is an indirect tax levied on the supply of goods and services, which was brought into action in order to bring down all the cumulative middle-man taxes. This has removed the bundled taxes like VAT, CST, Service tax, CAD, SAD, and Excise and the cascading effect of taxes. This, in turn, has lowered the burden on common man, as the same product is now available for a lesser price.
GST is mainly technologically driven, which implies that activities like registration, return filing, application for refund and response to notice needs must be done online on the GST Portal, which accelerates the processes.
The Cumulative Benefit Consumers are Finally Realising
Consumers are finally seeing the positive results of GST, as consumer experience has unveiled itself in a positive graph between June 2018 and April 2019 by receiving the tax cut benefits announced by the government. Only one out of three people are benefiting from GST, as basic essentials’ prices such as FMCG products and the bills in restaurants have come to a low unit. The 3 big GST rate cuts were implemented by the government in Nov 2017, July 2018 and recently in Jan 2019.
This too has been clearly studied and trends have been announcing cuts in the prices of household items. The GST council had made large-scale tax cuts on items such as shampoo, cosmetics, hair oil and groceries from 28% to 18% in November 2017. It reduced tax rates applicable to restaurants from 18% to 5% in November 2017, surveys depict. The survey also stated that 29% consumers in April 2019 think that brands are passing the July 2018 GST tax reduction benefits to them on home appliances, paints, and televisions as against 20% in October 2018. In January 2019, the GST council slashed tax rates on 22 items.
Under Indian law, companies had to pass on the benefits to customers after the government reduced GST to 18% from 28% and to 5% from 12% on many products. Unfortunately, Indian tax authorities have alleged that a number of big multinational companies have not passed on benefits from a tax cut to customers. Companies like P&G, Samsung and J&J have been reported to have a hand in such wrongdoings.
Right now, amidst the chaotic hues of elections 2019, such news should be allowed to form a view of what government you would like to elect for ruling your country. Democracy is a strong weapon we inherit, as Indians. A right sense of political, social and economic advancement should be nurtured in views of today’s controversial light. GST rate cuts could as well take an unanticipated turn in the near future, or so to speak, who knows! What are your views on it?